Reducing the Number of Doctor Visits by Supply-Side Regulations

Abstract

We analyze the effect of the introduction of a fixed budget for the ambulatory care sector in 1993, the introduction of individual practice budgets in 1997, and the tightening of the budget in real terms thereafter on the lengths of treatments of patients using data from the German Socio-Economic Panel over the period from 1985 to 2006. With a random effects-type two-part model in a difference-in-differences setting, we find evidence that the reforms did not change the patient’s behavior (and access to health care) but that especially the introduction of individual practice budgets in 1997 reduced the treatment durations.